Father and Son Convicted of Multimillion-Dollar Investment Fraud Scheme

[nitpicker]

https://www.justice.gov/opa/pr/father-and-son-convicted-multimillion-dollar-investment-fraud-scheme

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Monday, March 11, 2019

Father and Son Convicted of Multimillion-Dollar Investment Fraud Scheme

A federal jury in Birmingham, Alabama found a father and son guilty Friday of multiple charges for their roles in investment fraud and bank fraud schemes in which they stole over $10 million from individual investors—including multiple former professional athletes—and Alamerica Bank of Birmingham, Alabama.
(snip)

Donald Watkins Sr., 70, of Atlanta, Georgia, was convicted on seven counts of wire fraud, two counts of bank fraud and one count of conspiracy. Donald Watkins Jr., 46, of Birmingham was convicted on one count of wire fraud and one count of conspiracy. Sentencing is set for July 16 before U.S. District Court Judge Karon O. Bowdre of the Northern District of Alabama, who presided over the trial.
(snip)

According to evidence presented at trial, between approximately 2007 and 2013, Donald Watkins Sr. sold “economic participations” and promissory notes connected with Masada Resource Group, a company that he ran as manager and CEO. Investors paid millions of dollars after Donald Watkins Sr. and Donald Watkins Jr. falsely represented that the money would be used to grow Masada, which Donald Watkins Sr. described as a “pre-revenue” company that supposedly had technology that could convert garbage into ethanol. Instead of investing the money into Masada, however, Donald Watkins Sr. and Donald Watkins Jr. diverted funds to pay personal bills and the debts of their other business ventures. The evidence showed that victim money was used to pay for Donald Watkins Sr.’s alimony, hundreds of thousands of dollars in back taxes, personal loan payments, a private jet and clothing purchased by Donald Watkins Jr. and his wife. Emails introduced at trial also showed that Donald Watkins Jr. and Donald Watkins Sr. planned to obtain millions of dollars for these purposes from one victim on multiple occasions, when they knew that their victims trusted them to put their money to use in growing Masada. The defendants’ scheme eventually grew to include another business venture, Nabirm Global, a company that Donald Watkins Sr. claimed held mineral rights in Namibia.

Donald Watkins Sr. also defrauded Alamerica Bank, an entity in which Donald Watkins Sr. was the largest shareholder, the evidence showed. In order to pay hundreds of thousands in litigation expenses associated with another one of Donald Watkins Sr.’s business ventures, the defendants, Donald Watkins Sr. executed a plan to use a straw borrower to take out money from Alamerica Bank and give it to them. This straw borrower—Donald Watkins Sr.’s long-time mentor and a prominent figure in the Birmingham community—took over $900,000 in loans from Alamerica Bank and then immediately permitted Donald Watkins Sr. and Donald Watkins Jr. to use those funds for their personal benefit.
(snip)

[dixiegrrrrl]

1. Fraud seems to be the american business model these days...or these dacades. n/t